EMS term 1 and 2

Question 1

In a developing country

Answer 1

• little industrialization
• low standard of living
• average income low
• large % work for self/small
  businesses

Question 2

In a developed country

Answer 2

• advanced industrialization/
  technology
• high standard of living
• average income high
• Large % work for big
  businesses

Question 3

Formal business

Answer 3

• formal procedures + policies
• Large or small size
• employ a number of people
  that pay tax
• permanent recognized
  address
• keep official records, pay
  taxes
• use sophisticated marketing
  methods
• may use advanced technology

Question 4

Informal business

Answer 4

• no formal procedures +
  policies
• Usually small size
• Do not employ people
  that pay tax
• Employ less skilled
• do not have permanent
  recognized address
• simple & less sophisticated
• have uncertain income

Question 5

Name 3 types of business

Answer 5

Trading Business
(retail/sells goods)
Manufacturing Business
Service Business

Question 6

Trading Business
(retail/sells goods)

Answer 6

• Sell goods made by
  Manufacturing Business
• Buy @ ‘n price sell @ higher
• Formal - sell from shops
• Informal - sell from markets
  or home
• eg Clothing shops,
  supermarkets, car traders, toy
  shop

Question 7

Manufacturing Business

Answer 7

• Make products
• Use raw materials/semi
  finished products into
  finished products
• Sell to businesses or people
• Formal - well-equip factories
• Informal - could operate from
  home
• eg Bakeries, clothing
  factories, abattoirs

Question 8

Service Business

Answer 8

• Sell their skills & time
• Provide a service for a fee
• formal - operate from home
  or premises
• informal - home or anywhere
• eg doctors, motor mechanic,
  hair dresser, electrician,
  painter, dry cleaner

Question 9

Definition of an Entrepreneur

Answer 9

A person who sets up or buys a business, taking on financial risks in the hope of profit

Question 10

6 Characteristics of an Entrepreneur

Answer 10

• Innovative
• Committed & dedicated
• Motivated & independent
• Energetic
• Risk taking
• Bold & courageous

Question 11

5 Skills an Entrepreneur must have

Answer 11

• Communication
• Planning
• Marketing
• Management
• Financial

Question 12

What actions does an Entrepreneur preform

Answer 12

• Buy
• Sell
• Produce
• Make a profit

Question 13

Action of buying

Answer 13

First action is to buy/purchase equipment, raw materials or stock
eg furniture, computers, machinery or vehicles - known as capital goods

Question 14

Action of producing

Answer 14

Producing include, providing goods & services that customers want for which they will pay
Producing is the action of making the product - taking raw materials & turning them into something useful to be sold
Not all bushiness produce goods - Service

Question 15

Action of selling

Answer 15

Persuading customers to buy a product or service
Selling involves advertising & marketing
Explaining how a product works or the benefit to customers
Important that customers are satisfied = come back

Question 16

Action of making a profit

Answer 16

This is the goal of the business
No profit = business closes
Financial records are kept to keep track of the income & expenses

Question 17

Basic needs & wants of individuals

Answer 17

Air to breath
Water to drink / wash
Food to eat
Shelter to be protected
Fuel for warmth / cooking
Clothing

Question 18

Basic needs of families

Answer 18

Safety & security
Providing - working to provide the needs of your family eg food, education
Recreation - rest, relax and play
Primary health care
Cultural needs - religious, other beliefs

Question 19

Basic needs of a comunity

Answer 19

Health services - hospitals, clinics
Transport services - roads, busses trains
Commutation services - postal, telephone, internet
Education services - schools, university
Waste disposal - sewage system, garbage removal
Safety & security - police, army, fire-fighters

Question 20

Basic needs of a country

Answer 20

Natural resources
Money to pay for infrastructure
Land for farming
Education & trained labour

Question 21

Maslow

Answer 21

Basic - Survival
Then - Security
Then - Social
Then - Self-esteem

Question 22

Needs & wants affect communities in the following ways

Answer 22

Determine what goods & services are sold
Can effect how community works
Poor will not be able to spend money @ local shops
Rich will be able to spend money @ local shops
Needs of a country is met by local government

Question 23

What is a source

Answer 23

Things that help us do something
They satisfy wants a and needs
Things we use to produce goods & services

Question 24

Name 3 kinds of sources we get

Answer 24

Natural
Human
Human-made

Question 25

Limited resources

Answer 25

Wants & needs are unlimited Resources are often limited - water Limited - not a lot of Use resources carefully - reuse Most common limited resource is MONEY

Question 26

Non-renewable resource

Answer 26

Can run out & can not be replaced

Question 27

Renewable resource

Answer 27

Will not run out & can be replaced

Question 28

What are Free Goods

Answer 28

Not scarce found in abundance High supply results in zero price Zero price dependent on situation eg air @ bottom of mine

Question 29

Economic goods

Answer 29

Goods that are not free Scarce or limited - have market price Any good which people pay for Price influence by scarcity

Question 30

What is the economic problem

Answer 30

Unlimited wants & needs but Limited resources

Question 31

3 Factors of production

Answer 31

What to produce? How much to produce? Who gets to consume the products that are produced?

Question 32

Technical efficiency

Answer 32

Country must use all resources to the full, in a way that gets the most production out of them

Question 33

Allocation efficiency

Answer 33

Country must produce more of the good and services that are in highest demand

Question 34

Needs & wants satisfied by water

Answer 34

Habitat for animals People need water to drink, cook, clean To grow plants To make electricity

Question 35

Budget

Answer 35

A plan of how much money you have & how you will spend it An Estimate of future income & expenses

Question 36

Why are budgets important

Answer 36

Keeps contol of finances Help stay out of debt Help save money Identify areas spending to much Decide what are more important - basics before luxury It changes as your income changes

Question 37

Who prepares budgets

Answer 37

Individuals Households Businesses Governments Non-profit organisations

Question 38

What does personal budgets help with

Answer 38

Puts you in control of your money Helps set goals Inspires culture of planing & saving - investment in future

Question 39

Two main parts of Budget

Answer 39

Expected Expenditure Expected Income

Question 40

Examples of Expenditure

Answer 40

Capital costs Running costs Staff costs Operational costs

Question 41

Examples of Income

Answer 41

Donor funds Donations Fundraising Sales Commission Salary

Question 42

What does SWOT stand for

Answer 42

Strengths (internal/good) Weaknesses (internal/bad) Opportunities (external/good) Threats (external/bad)

Question 43

The 4 P's of marketing

Answer 43

Product Price Place Promotion

Question 44

3 Types of media used

Answer 44

Print Media Broadcasting Internet

Question 45

Advantages & Disadvantages of Print media

Answer 45

A: Cheap D: Only in black & white

Question 46

Advantages & Disadvantages of Broadcasting

Answer 46

A: Large group of people D: Very expensive

Question 47

Advantages & Disadvantages of Internet

Answer 47

A: New market Place D: Limited due to access

Question 48

What are the principals of Advertising

Answer 48

AIDA Attention/Awareness Interest Desire Action